The Relationship between Alcohol Availability and Alcohol Consumption

This paper examines the relationship between retail alcohol supply and total alcohol consumption. In Finland, the state alcohol company (Alko) has a retail monopoly on the sale of stronger alcoholic beverages. Only drinks with a maximum of 4.7% alcohol by volume can be sold in licensed grocery stores. The influence of the state alcohol monopoly was examined using data from Alko outlets and controlled sales from restaurants and grocery stores, prices, regional differences in consumption levels, and the trend over time. Data were collected from Alko registers and the National Institute of Health and Welfare. Panel data from regions of Finland over the period 1995-2009 were analysed using regression models. This study provides evidence that alcohol supply has an impact on alcohol consumption. The consumption of strong alcohol and wine increases as the number of Alko outlets grows. Taxation through pricing also affects the purchase of strong alcohol. The disposable income of the consumer does not influence consumption, and there is no relationship between the number of Alko outlets and alcohol consumption in restaurants and alcohol purchases from grocery stores.